GreenStar Rising

Ithaca’s Cooperative Market acquires, reconfigures, reopens second store

GreenStar ext_deli.jpg
The new Greenstar store is located in a popular downtown shopping mall with a Deli hot case, grab and go inside.

At 7:00 a.m. on May 11, 2004, GreenStar Cooperative Market opened the doors on its second location, a 4,000 sq.ft. space with 2,500 sq. ft. of retail. The previous owners had closed the doors just 87 hours earlier.

The amount of work that we accomplished in those hours was the amazing result of a heroic effort on the part of a dozen dedicated GreenStar staff and member-owners. However, much of the important work on this expansion project came before we closed the deal and took possession that Friday afternoon.

In the spring of 2003 one of Ithaca’s long-time, locally owned businesses appeared to be in trouble. Oasis Natural Grocery, owned by a partnership of individuals, was displaying signs in their front windows encouraging people to shop with them if they didn’t want to see the Oasis disappear. Later on in the year one of our local weekly papers ran an article on Oasis, again indicating that it was not just business as usual for them.

GreenStar and Oasis had long enjoyed a supportive relationship, both growing with Ithaca’s natural foods community. GreenStar’s original location placed the co-op just two blocks north of the Oasis site in downtown Ithaca’s Dewitt Mall, and our current location places us just six blocks west. GreenStar had long sold bread from the Oasis bakery operation, and Oasis sold the GreenStar’s Ithaca Chai. Over the years we had employed many people in common, and the Oasis partners and GreenStar managers frequently shared information about supplier and product issues.

In the summer of 2003, with the approval of GreenStar’s Council (board of directors) I approached the Oasis partners to offer GreenStar’s assistance if there was a way we could be of help to them. Not long after that initial approach, I received a call from one of the partners asking if GreenStar might be interested in purchasing the business, rather than just helping them. Our Council expressed interest in investigating the feasibility of purchasing this long-time local ally in the natural foods business, and a flurry of background work began.

Because the Oasis partners did not have a price in mind for the business, we needed to construct a price based on the value we believed the business would have for our cooperative. In order to put together a recommended asset purchase agreement for the Council to discuss, we proceeded to commission a market study for the location, to look at the financial information from the Oasis partners, to assess the value of the equipment, and to work with a local accounting firm to establish a value for the goodwill. GreenStar’s Council looked carefully over the recommendation and gave their stamp of approval to the asset purchase agreement, which meant it was on to the final step.

Final approval for any new retail location for GreenStar must be given by our membership, currently around 4,800 strong. In March of 2004 we sent a mailing to all those member-owners, encouraging them to cast their vote for or against GreenStar’s expansion into the Oasis site. In addition to the member-owner mailing and the ballot it contained, ballots were available in the co-op throughout the two-week voting period.

We also encouraged all member-owners to come to a special membership meeting at the end of the voting period to discuss the purchase, and leading up to that meeting we hosted three sessions in the co-op where member-owners could have their questions answered by the project team and Council members. As are most issues at GreenStar, the Oasis expansion was hotly contested.

Proponents of the purchase spoke about the value of preserving a long-time Ithaca business, the pedestrian-friendly downtown location, the opportunity to begin baking our own bread, and the synergy of locating in the Dewitt Mall, home of Moosewood restaurant and several other businesses of GreenStar’s ilk. Opponents voiced concerns about GreenStar’s ability to make the location work when its current owners could not, the proximity of the new location to our current location, the proposed purchase price, and the shift in focus away from some current projects that would be required to make the new location successful. When the votes were counted, GreenStar member-owners had approved the Oasis expansion by an overwhelming majority with 910 votes cast, 687 in favor, 223 opposed, and 67 ballots disqualified for various reasons.
 

Logistical challenges

Once the vote was counted we began to review our list of items to complete before closing. We had several logistical issues to look at in opening a second location. How would we ensure that prices were the same at both stores? How would we make sure that our member owners could receive discounts at either location? Since our plan was to continue to produce all our deli food in the kitchen at our main store and send food to the new location, we needed to figure out how to transport the food and how to account accurately for the transfer of food. We knew we would eventually move our pastry bakery to the new kitchen and bake bread using the Oasis recipes, so the systems we created for transferring deli food down the street and on the books needed to be versatile and expandable.

We knew we needed to have our systems ready to go, because our plan was to interrupt business for as short a time period as possible. GreenStar’s talented and energetic staff worked diligently yet swiftly to answer questions and develop systems so that we would be ready to open the doors to a smooth-running second store. Our project team leaders—10-year GreenStar veteran deli department head Allyn Rosenbaum and Scott Lawhead, former front end manager turned satellite store manager—kept their palm pilots hopping with list after list of details.

Department managers at our main store pitched in to help determine the product line, starting with the top sellers at our main store, blending in the old Oasis product line, and going from there. We decided to export our product database daily from GreenStar’s main location to the new store, ensuring that prices were the same in both stores. We found a way to connect our home-grown member owner and member worker database to a remote location, to ensure with nightly updates that work credit never had more than a one-day lag time between locations. We blazed a trail for deli transfers, deciding to allocate labor and cost of goods sold based on the retail value of deli products transferred to the new store.

Watching the project come together was amazing, particularly as we entered the last week. However, nothing could compare to the experience of those 87 hours between closing the doors on Oasis and opening the doors on GreenStar’s second store. We cleaned and painted, we laughed and cried, we received and reset, we cleaned some more, we wired, we changed light bulbs, ceiling tiles, the layout, our minds. After what felt like either a week of work or one really long night, we opened the doors.
 

“Call it open”

Throughout the process, “What will the new store be called?” was the question I heard the most. One local paper even printed, perhaps half seriously, my response of “We’ll call it open.” We decided to name the second store in the same way we decided to expand into it: by membership vote. We invited all member owners to submit suggestions for names. We received an impressive 193 suggestions, which we then passed on to a panel of cooperative and marketing experts who volunteered to work with our marketing manager to trim the list to those names that would destine our new location for success. Our panel returned six names to us as fitting the bill, our Council narrowed the list to three, and our membership is in the process of selecting the name from the list of finalists.


Some of you may remember my previous article on expansion (CG #99, March–April 2002), where I likened GreenStar to a tortoise rather than a hare in our approach to expansion. I still consider GreenStar to be a practitioner of slow growth, taking careful time to decide what to do next, building slowly and carefully each addition or expansion to our current operation. However, GreenStar has now proven that, once a decision on which step to take has been made, we’re ready to rush to the finish and able to win the race.

See other articles from this issue: #115 November - December - 2004